Family Bank has acquired a KES 1.5 billion loan portfolio guarantee facility from the African Guarantee Fund for Small and Medium-sized Enterprises (AGF) to increase its loan book to micro, small and medium-sized enterprises, women-led businesses and climate-friendly investments.
In a statement, Family Bank said the guarantee agreement will cover funded facilities such as overdrafts, term loans and non-funded facilities such as letters of credit, bank guarantees, among other credit facilities.
In addition to the extension of the credit guarantee facility, the African Guarantee Fund will provide a capacity-development assistance to Family Bank that will be utilized for technical expertise to the MSMEs and expose entrepreneurs to global knowledge on business development and climate-smart ventures through the five-year agreement.
Commenting on the credit facility, Family Bank Chief Executive Officer Rebecca Mbithi said through it, Family bank can now scale up lending to MSMEs who form over 80% of its customers base.
“With the gradual recovery of the economy as we contain the effects of the pandemic, we are able to widen our capital base to support more MSMEs by extending credit at favorable terms,” said Mbithi
AGF Group Chief Executive Officer, Jules Ngankam on his part said additionally, the renewed partnership will also focus on empowering women-owned and climate-focused SMEs.
“SMEs are very crucial to the achievement of meaningful sustainable development. Their greatest barrier, however, is access to finance. Our loan portfolio guarantee agreement with Family Bank is structured to reduce the perceived risk of SMEs and to solve their holistic needs through Capacity Development assistance”, he stated.